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Cable Technology Feature Article

September 27, 2012

Cable, Cloud-Based Gaming Out to Kill Consoles

By Steve Anderson, Contributing TMCnet Writer

Reports from earlier this week suggest that both AT&T (News - Alert) and Time Warner Cable have designs on the gaming market, and in the process, are out to threaten the market formerly held by consoles like the PlayStation and Xbox lines, as well as those from Nintendo. The exact time frame may be varying from company to company, but one thing is quite clear: cable wants to kill the console.

Later this year, according to reports, trials are set to begin for cloud-based gaming services, with an eye toward wider releases to start sometime in either 2013 or 2014, depending on the carrier. The testing is designed to tweak the technology and get it ready for play on a much wider stage, a stage that has become somewhat wider in light of reports that consumers are already leaving consoles behind in order to game on tablets and smartphones, and this has lead to a drop in video-game hardware sales of 39 percent last month from the same time last year.

Lazard Capital Markets' Atul Bagga, a video-games analyst with the firm, said that cable and phone companies were "looking for new ways to monetize their users and gaming can be pretty compelling", adding that "everybody has a TV." Carriers like the thought of offering more services to their digital TV subscribers, especially in light of the cable cutting movement that threatens to take quite a bit of business away in a down economy. Additionally, cable providers are also looking to augment their offerings beyond those of social games, like those offered by Zynga (News - Alert), and beyond the classics in casual gaming like "Tetris" or the various solitaire titles, and rather are looking to get into big-name action games like those offered by Electronic Arts Inc, or EA. Indeed, the president of Electronic Arts Labels, Frank Gibeau, referred to games via Web-based TV as "a big opportunity," though he wouldn't give a time frame along with that.

Yet at the same time, the issue of execution is one that remains problematic. Cable companies would have to invest in a variety of technologies to make streaming gaming happen. Software technologies like virtualization would be necessary, as would improved hardware at the user level, which would require potent new graphics processing technology. The issue of bandwidth would once again rear its ugly head, as streaming games require a large amount of bandwidth to operate. With companies like NVIDIA (News - Alert) working on data center technologies, however, the issue of infrastructure may be on track to solve itself. However, cable companies would have to do something that they've been seen as unwilling to do in the past: boost bandwidth available to users, and do so without substantial price hikes.

But with consoles looking into digital distribution of games--all three major console companies deliver some kind of downloadable game system, and Sony recently purchased the Gaikai gaming service as well--cable's late entry may not be effective. Additionally, the next generation of console hardware is expected to start showing up at this year's E3, and has already made its appearance on one level with the Nintendo Wii U, so cable will likely find itself forced to compete with much more powerful consoles than the current market has seen.

Cable's entrance into gaming isn't a bad idea, but it's an idea that will require a lot of work and resources to properly execute. Cable may never replace the console, but it may serve as a nice complement to it.

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Edited by Rachel Ramsey

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